The cinema chain hopes to be back from bankruptcy protection before the middle of the year, but the debt-ridden business expects any deal with its creditors will wipe out its shareholders.

A spokesperson for Cineworld said on Friday it had been approached by “a number” of potential suitors, but none of them had been willing to pay in cash to buy the whole business.

The update has sparked fears that the chain's UK cinemas are at risk, including two locations in Essex, Basildon and Braintree, according to the Sun. 

The chain is also planning to build a cinema in Colchester's Northern Gateway and is scheduled for completion this autumn.

Cinewords operates more than 100 cinemas across the UK and the Republic of Ireland.

Cineworld’s cinemas – which include Picturehouse in the UK – are still open as usual during the bankruptcy proceedings.

What is the current situation? 

Cineworld may have been hoping for a sale, but it was always seen as unlikely it would find someone who was willing to take over the business and deal with its six billion dollar (£5 billion) pile of debt.

So while the business now hopes to come out of US bankruptcy protection sometime in the first half of this year, it will likely spell a painful end for its current shareholders.

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Based on the discussions it has had, Cineworld said “there is a route” to emerging from the so-called Chapter 11 bankruptcy proceedings.

The cinema chain hopes to be back from bankruptcy protection before the middle of the year (Image: PA)

But, it added, “the company does not believe that there will be sufficient creditor support for a plan that contemplates any recovery for equity interests”.

It is thought that any rescue deal for the business will mean handing over control to the companies and people that Cineworld owes money to. And shareholders are unlikely to get anything back.

On Friday, Cineworld said: “The company has now received non-binding proposals from a number of potential transaction counterparties for some or all of the group’s business.

“None of these proposals involves an all-cash bid for the entire business.

“The company is reviewing such proposals in conjunction with its advisers and key stakeholders and, whilst no decision has been made as to whether to pursue a sale transaction, and the terms of any such transaction remain uncertain, based on the proposals received to date, it is not expected that any sale transaction will provide any recovery for the holders of the company’s equity interests.”

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Shares in the business dropped by a third in London after the news on Friday.

 What could this mean for the planned Colchester cinema? 

Last year Colchester Council said it was happy with Cineworld’s financial position, adding it has contingency plans in place with other providers.

But uncertainty has continued to persist over the future of plans for a cinema as part of Northern Gateway.

Last month Colchester Council confirmed the cinema development at its leisure park will “proceed as planned”, with an ambition to open in September.

A council spokesman said: “Cineworld continues to operate whilst it seeks to sell its UK business.

“Whether Cineworld is the future operator or not, we expect the new cinema to open as part of the successful delivery of a diverse leisure offering at Colchester Northern Gateway.

“This £65 million leisure development, funded by Canada Life, gained planning approval in 2020 with construction of the 200,000sq ft scheme starting in February 2022.

“As well as a cinema complex, the leisure park boasts an impressive line-up of occupiers committed to the scheme, including Hollywood Bowl, Puttstars, Kervan Kitchen, Greggs, Wendy’s and a rapid charge electric vehicle charging station.”